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Saturday, December 3, 2011

Fair or Fare

In our increasing volume of class warfare discussion the word "fair" is being used constantly. How much should the 1% pay in taxes? How much should the 99% pay in taxes? How much should the "common worker/laborer" make, and what should an "executive" make? This is really an argument about engineering the disparity of wealth.

The best definition of fair that I can recall is "Either you get to slice the pie how you want and I select the slice I want or visa vera".

First lets use this method to determine taxes. You pick the rate and income brackets you want and I will assign the rates to the various income brackets that I want. If that were the way tax rates were decided then the outcome would be a flat tax - guaranteed.

Next how do we engineer the "fares" - what do we pay a worker for services rendered - or who gets to earn what in the pie. This becomes a discussion of compassion and responsibility regarding the disparity of wealth (which will always exist) in a capitalist society.

Here is where the word fair and my definition of fair breaks down. Lets say that we want to engineer the exact difference between the lowest hourly worker (minimum wage) and the highest paid executive. Again, if you pick what that difference is - then I should be able to pick which side of that I get paid. Hence we would have flat incomes. But that isn't how capitalism works.

So the compromise (which is also a definition of "Fair") is --- to allow a free floating exchange rate of difference between minimum wage and the highest paid executive (something the conservatives like and liberals dislike) we establish a progressive tax system to exist (something the liberals like and the conservatives dislike).

What isn't fair is trying to re-engineer the disparity of wealth both ways - cut the pie and pick your slice.